Small Business Slots on ED Contract Up For Grabs

Although the number of collection agencies that work on the U.S. Department of Education’s student loan collection contract is limited, there appears to be plenty of opportunity for new faces to join the list when the multi-year contract is renewed later in 2008, according to ED officials.

“We’re definitely going to see some turnover on the contract,” Richard Galloway, contracting officer’s representative for the department, told insideARM, “especially on the small business side.”

Four of the five collectors now working on the contract under the small business set-aside provision no longer meet the small business classification, explained Galloway. That means more competition to take their places.

There are currently 17 collection agencies working the contract, with 12 falling into the unrestricted – or “large business” – category and the remaining classified as small businesses. To qualify as a small business, a firm must be for-profit and have average annual revenues under $6.5 million for the past three years. The small business collection agencies currently on the contract are Account Control Technology, Canoga Park, Calif.; Collection Technology Inc., Burbank, Calif; Continental Service Group, Fairport, N.Y.; Financial Management Systems, Bethesda, Md.; and Premier Credit, Indianapolis, Ind.

Of that group, only Collection Technology, Inc. will remain classified as a small business.

The competition isn’t limited to just the small business set-aside. The four current small business collectors being reclassified will try to remain on the contract in the unrestricted category, according to Galloway.

Besides, says Galloway, “There is no guarantee, even in the unrestricted category. This is a wide open process.”

ED’s Federal Student Aid department, the unit that administers all federally-backed student loans, is holding a pre-solicitation conference on January 22 in Washington, D.C. for any collectors that might be interested in working the contract. Although contracts can be awarded only to companies on a GSA Schedule 520-4 – a government contracting qualification process – there still would be time for a company to theoretically attend the conference and get on a 520-4 if “they got their act together immediately,” according to Galloway.

All conference attendees must be registered by January 17. For more information, and to register, go to http://fsaconferences.ed.gov/conferences/pcaprocurement.html